Examination of Witnesses (Questions 540
- 559)
WEDNESDAY 2 MAY 2001
MR PETER
BARR, MR
GWYN HOWELLS
AND MR
BOB BANSBACK
540. You have made some assumptions, presumably,
on our ability to resume exports per se, and also, presumably,
on the value of our currency, which has a significant impact on
the viability of the export sector anyway.
(Mr Bansback) Yes. On the currency point, we have
had two or three years of a very strong currency, where, despite
this, we have sustained still almost 30 per cent of our sheep
going for export and between 15 and 20 per cent of our pig meat
production going for export. If we had the opportunity for beef
we would have been able to do it as well. So I think we have sustained,
if you like, bad times from the currency point of view. In terms
of being able to move back into exports, with the exception of
certain companies, which were very specialised on exports and
will be considering their position at the moment and may well
not be able to survive over a period, other than that, our belief
is that there will be a capacity to export and to resume exports.
541. Turning, lastly, back to the home market,
who are the key players in the supply chain whom you must persuade
not just to nod at your plan and say, "That seems an interesting
piece of paper" and file it, but instead demonstrate clear
commitment, both in resource terms and in terms of their will
to co-market with you?
(Mr Barr) I think one has to take whole supply chain
with you and I think one also has to remember that the demand
chain—
542. There are some key people to whom others
will be looking to demonstrate some leadership.
(Mr Barr) Yes. Obviously one has to take the industry
with you. It has to be a collaborative thing. I have chaired a
number of committees very successfully where we have made change
in the industry, and, unless you can take people with you, you
are going to find it very, very difficult. I think that one must
also recognise, as we have mentioned here, that there probably
is going to be more than one demand chain and there will be a
secondary one, and one very much has to take every one with you
because you are—as I think the programme says—the
weakest link. We do not want weakest links; we have to take the
whole group with us. In one way, I suppose, coming into it, if
the MLC did not exist today you would maybe have to invent it,
because we need someone in the middle here who can bring those
various groups together and is trusted and is seen as an operation
of integrity. It is nearly as if it was there for the occasion.
Mr Jack
543. Just to follow that line of analysis in
the context of the discussion that has taken place so far about
the nature of the livestock industry in the context of foot and
mouth, we seem to be trying to reconcile almost the irreconcilable.
On the one hand we have companies like Tesco, operating with St
Merryn Meat, big modern plants where the whole objective is to
improve the meat offer, with animals moving, relatively speaking,
long distances to this central location; and, in the context of
foot and mouth, much criticism of animal movements over long distances.
We are told, for example, that the sow had had to go to a plant
in Essex because that was the only plant that could extract the
maximum value for that particular type of animal. There has been
a lot of discussion about should we localise, should we go back
to a network of small scale, local abattoirs, local producers,
local traceability, local everything. How do we achieve the type
of objective you have set for the restructuring of the livestock
industry, producing what the consumer wants, close control of
the costs, against an agenda which may be moving in the opposite
direction?
(Mr Barr) I think you have probably been looking at
my notes. That is the question. That is why not only do I want
to address the whole thing to farming but I am trying to get world
class experts from the outside as well. I am going to companies
like major international players in logistics and so on and saying,
"Let's worry this problem." If we take the food project,
with which I know you are familiar, we borrowed resource from
80 international companies and we had 180 people working at one
point—not paying for any of them, borrowing them—on
problems. The reason I think we met every deliverable and every
schedule and got things implemented was that we put in a lot of
off-the-wall thinking. It is really a question I would like to
answer at some future point because I do not know the answer to
it. I am deliberately trying to come at this with a blank sheet
of paper, because the danger is trying to patch up what you have.
It might be that that is necessary—you know, to put patches
on the dams—but my job is really to build another dam behind
it. So we really have to find: Is there a better way to do things?
544. I was very interested, having some understanding
of horticultural industry, in the story you told of improving
the quality of the tomato production in the way that you describe,
because in my area we have an initiative called "Keep the
Fylde farming" and it is about local production, local traceability,
local quality standards; but equally we have an argument about
the importance of the local livestock market as a clearing area
for small scale, very variable product. There is a lot of attachment
to this type of powerful local discussion against your picture
of needing to do something nationally.
(Mr Barr) That is why I said there is a two-tier market,
in that part of the horticulture story was that people did not
want to grow things like tomatoes on the vine and plum tomatoes
and all the varieties, and there was a massive, massive import.
Part of that exercise showed that there could be effective import
substitution and we could do it. Equally, things came as side
issues, like herbs. Herbs were virtually imported, but one found
that a lot of the glass could be used for something like that,
which is a massive growth industry. And a lot of niche players
were identified and niche people were developed within that exercise.
I certainly feel as if there is a very good case and we must not
forget organic, we must not forget local—you know, there
is an entitlement. I think, yes, there is globalisation and at
best we must be in a global class, but there also is localisation
and I think localisation would be very good in future.
545. I want to move on now to part of your submission
where you discuss the import policy of meat and just ask the simple
question: Given that we could be self-sufficient in our different
species, why should we import any meat?
(Mr Barr) Would you like to answer that, Gwyn?
(Mr Howells) Yes, certainly, and then perhaps Bob
would like to join in. There is of course, as far as sheep meat
is concerned, a seasonality issue, where our product is arguably
not at its best during the January to March period when New Zealand
lamb, particularly New Zealand chilled lamb, is able to come in
and fulfil that market. Similarly, obviously as we have already
heard, we are major exporters particularly of light lambs—this
is particularly a Welsh issue, an issue for farmers in Wales at
a particular time—and that is why it is important that we
can recover the markets. But I think the general point is that
there is this growth of the global marketplace with particular
markets having peculiarities or interests—in particular
cuts, for example—that are not attractive in this market.
If we take the example of pigs and pig meats, we know that the
trotters are a delicacy, for example, in the Far East, whereas,
although they are beginning to be a delicacy in up-market London
restaurants, it is wrong to say that there are major opportunities
for that part. Shoulder meat, again for pigs, is a classic exported
product, that, because we can no longer export pig meat, has come
back on the market and actually has served to depress the price
of pigs because of the lack of market.
(Mr Bansback) Just to add to what Gwyn has said, there
is the complementarity. An animal does not have a precise balance
of cuts/products for a particular country, and therefore in pig
meat, for example, we have a shortage of certain parts of the
pig here (the loin for example, which is in very heavy demand),
we have a surplus of other parts of the animal, and therefore
we quite sensibly have an import and export trade. I think the
other point is that, with the exception of New Zealand lamb, we
are talking about trade within the European Union. That is what
is happening in the pig meat and the imported beef sector.
546. I would be interested to explore that further,
but not now. In your document you say, commenting on foot and
mouth, that in both cases there is a strong likelihood that imported
meat was part of the cause, hence the line of my earlier questions.
What recommendations are you going to make to the Government about
improvements to the meat import regulations? Clearly you see that
there is a threat. What do you want the Government to do to deal
with it in the future? If I could add, are there any other nasties
that you might by now have observed, other than foot and mouth,
that could come in with imported meat that might present a threat
to our livestock industry?
(Mr Bansback) We have identified really two issues
in terms of import controls here. One is to do with the level
and the amount of veterinary surveillance at ports. We would simply
like to ask the question: Are the checks sufficient? It is under
the control of Customs & Excise, but is the regulation of
these controls such that we are going to stand the best possible
chance of picking up anything that is coming in through different
sources. That is the first issue. The other point that we have
referred to is this issue of personal imports through airports
and ports, which we feel could be a loophole from some of the
evidence and even the anecdotes that we have been hearing about
coming in. We are very conscious that the countries that attach
the same level of importance to animal health controls as we do,
like America and Australia and New Zealand, do have stronger protection
measures on personal imports.
547. I am intrigued by the rather tentative
way you are approaching this issue. You have got some extremely
good contacts in the meat trade in the United Kingdom: at times
some of the stories coming out of it made all our hair stand on
end. But you said it would be a good idea to ask a question about
these various things. Given your input and expertise—because
I see that you have contributed a lot of expert staff, for example,
to deal with foot and mouth issues—are you not going to
be more proactive in using all your expertise actually to make
some firm recommendations to Government about what it ought to
do rather than simply asking the question to Government: "Should
you not look at this?" Do you not feel you have a more proactive
role to play?
(Mr Barr) As I say, I have only been under four weeks
here, but we have, within our competence, tried to express things
which we feel should be brought to your attention. Obviously we
feel that this is a first appropriate step at this time. At the
end of the crisis one must see what lessons have to be learned.
But we certainly felt about it sufficiently seriously to feel
it should be brought to both your attention and Government.
548. Let me take you to another sentence in
your report. You do decide to give a very clear steer to Government
about the State Veterinary Service. It says, "We believe
that the current outbreak has highlighted again the need for adequate
resourcing of the State Veterinary Service." So you obviously
believe that currently the staffing is inadequate. Perhaps you
would like to expand a little bit on that and tell us what you
perceive are the inadequacies and what you think ought to be done.
(Mr Barr) I think we have probably covered it in that
statement, and we have drawn to Government's attention. At this
moment in time, I have maybe made the wrong decision but I have
seen that the MLC's priorities now are to give practical nuts
and bolt help to our stakeholders, and that should be one of our
biggest concentrations. The next concentration is very, very much
that we must not get too dragged in to the immediate crisis, we
must get on with the recovery plan and very much our energies
at this moment in time must be the recovery plan, and I am sure,
like everyone else, we will be analyzing what has happened but
just now it is going to be absolutely that recovery plan.
549. I agree with that, but we would not be
where we are if there had not been a fault somewhere in the defence
mechanism. The question I ask also—because I am told by
veterinary experts that there are other livestock diseases which
are not, thankfully, in the United Kingdom but which could come
here—is as to whether in fact we should be also shoring
up the defences at the same time that we are recovering, because
the last thing that we want is another outbreak of this. Because
you say also in your report, talking about the review, that "This
review should include an effective surveillance role throughout
the country including the involvement of veterinarians across
the spectrum." I mean, who else ought to be involved in the
surveillance exercise about meat imports to this country? Because
there is a huge amount of public scepticism that stuff coming
into the United Kingdom is not looked at by anybody; it is merely
let in by paper checks. Somebody or someone has brought in something
which has caused millions of pounds worth of damage to our livestock
industry, huge hardship, billions off the tourist industry. We
are talking big bucks here.
(Mr Barr) Not once but twice, if we include Classical
Swine Fever.
550. Yes.
(Mr Barr) I mean, all I can say at this point is I
totally agree with you. I can assure you that we will very, very
much press that case.
551. Are you going to use your expertise in
hazard analysis to look at the holes in the ring-fence round the
country over food imports and make some firm recommendations?
(Mr Barr) Speaking personally, I must understand more
clearly, because of course one of the things that I cannot pretend
to be fully up to pace with yet is the European aspect, because
so much of ours already comes through Europe. So in a sense there
is a European position on this whole thing. But, obviously, with
two such serious outbreaks in such a short time, you have assessed
what must be a very major priority.
552. My final question under your heading in
your report, Issues for Government, The Importance of
Exports to the Industry. We have touched on those. Perhaps
you would like to say a word or two about how you see the role
of Government in trying, if you like, to improve the question
of market access for our exports of meat products in the United
Kingdom.
(Mr Bansback) I think there are two things in particular.
I think, firstly, we have to get exports moving again. For that
to happen, we need to pursue the legislation that exists under
the EU, regionalisation policy and exploring issues like that
to see how quickly we can get exports moving. Because of the importance
of exports to the industry, which we have underlined, we will
be keen to work closely with Government to make sure that is the
case. I think the second issue is that, as soon as we have managed
to get the agreement for the country to export, we have to make
sure that we can get back into those markets as soon as possible.
I think there are important issues to do with information, to
getting positive messages about this industry, which is going
to have good controls and is going to have excellence within it,
in order to get over the positive message of what is happening
in this industry to counteract what sadly are quite a lot of negative
messages going around, particularly in other European countries
at the moment.
(Mr Howells) Chairman, if I may add to that. A part
of the activity that we undertook on beef was to bring representatives
of consumer associations, notably from France and Italy, over
to see the premises, to see the plants, to see the recovery of
the beef industry in this country. Because that is actually one
of the big signals, when they go into a supermarket and see how
much beef is being sold, they can hardly believe it, because the
media overseas is actually representing the market in decline
here rather than with a positive status.
Dr Turner
553. I want to ask a supplementary on this £25
million programme which you say you cannot fund because of your
lost income. I think there are some people who will want an answer
to the question: Why is there not some cautionary funding available?
Is it not the nature of your work that the time you are most likely
to be needed to be most pro-active is when your income drops?
Is it not remiss of you that you are not in a position to be saying
that you are asking the Government to contribute rather than to
fund this recovery project?
(Mr Barr) I will let Gwyn again amplify my answer,
if I may, but I think the very fact that beef is back to where
it was pre-BSE and the amount that has taken, plus all the troubles
in the pig industry, mean we have used up the kitty and that is
unfortunate. And there was a reserve to deal with contingencies,
we just have had rather more than we would reasonably have expected.
I would take the chance, as you have given it, in answering that
question, that I believe money spent quickly will actually save
the country and economy a lot of money in the long term, because
all of my experience has said: Get it up front. The MLC do not
have the money but I think by spending that money now we will
get the levies back, we will get the sales back, and it will be
a much, much easier job than trying to catch it once shopping
habits are broken. It would be much easier to reinstate.
Mr Drew
554. What is your relationship like with the
Food Standards Agency?
(Mr Barr) I would think very positive. We very much
respect their position and welcome the function. We certainly
see ourselves very much that we will be a very, very consumer
orientated operation. I would hope that we would be very much
in line with their thinking.
555. Would you accept, as a result of the current
crisis, that you would be engaged in something of a major inquiry
to look at options with regard to the human food chain and livestock
farming? I mean, looking at extremes: banning import, for example.
Or the other extreme would be learning to live with animal disease
and maybe vaccinating or whatever.
(Mr Barr) I think as far as the consumer is concerned
we simply must develop a chain of complete integrity and no option.
All of my efforts will be to look and the MLC to say, "How
can we bring . . ." Our food industry is world class—you
know, our wider food industry. The difference I probably see:
I see farming as part of that 14 per cent to 16 per cent of our
GDP and our biggest employer and we cannot have a tail end to
the food industry. I very much see that that which is the norm
elsewhere should be brought into farming.
Mr Öpik: I apologise for my absence. I
was drawn away by your arch rival the potato.
Chairman
556. It was to have his photograph taken.
(Mr Barr) Vanity will out.
Chairman: We can see the similarity.
Mr Öpik
557. That is not parliamentary language! I want
to ask about industry practices and restructuring. On page 4 of
your memorandum you do discuss the two possible food chains. There
may be an implication of additional red tape. What is your view?
Would your proposals increase the bureaucracy and red tape applicable
to farmers?
(Mr Barr) Certainly my personal objective is the reduction
of red tape. If you take something like the IT which is generally
used in the food industry, that has taken a lot of paper and a
lot of work out. If you took something like, say, electronic tagging,
you would simply scan the animal. Part of this exercise has to
be to release the farmer to farm. Good supply chains do not have
a lot of red tape. It is rather like wire that keeps blowing:
you have to put in a bigger fuse all the time to eliminate that.
I think if we clearly identify the hazards we could then concentrate
on that aspect which is the most dangerous. I would like to see
a reduction of red tape. Anything we can do to simplify the system
would be good news.
558. Is it fair to say that one of your strategic
goals would be to reduce bureaucracy rather than increase it in
your restructuring plans?
(Mr Barr) That certainly would be my personal objective,
and simplifying the chain is the way to do that.
559. I have two other quick questions. One is:
"Restructuring" is a word which makes farmers nervous.
Why do you feel it is necessary to do something as dramatic as
to restructure the industry in order to achieve those goals you
have just described?
(Mr Barr) I wish we could find a better word than
"restructure". There is a prize.
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